Q.C. clause A clause in a professional indemnity policy providing that the insured shall not be obliged to contest any proceedings (with consequent undesirable publicity for the insured) unless a mutually agreed Queen's Counsel shall advise in favour of a contest.
Qualifying policy A life assurance policy approved by the Inland Revenue as eligible for favourable tax treatment.
Quantum (of damages) Damages expressed as a sum of money.
Quantum meruit As much as he has earned. When a contract comes to a premature end a person who has performed services under it may be entitled to a payment for what he has done (quantum meruit) even though his performance under the contract has not been completed.
Quarter day Four days in the year on which rents and other engagements were commonly met and from one of which it was customary for fire insurances to run, viz. (in England, Wales and Northern Ireland): Lady Day, 25 March; Midsummer, 24 June; Michaelmas, 29 September; Christmas, 25 December
Quay to Quay The period of cover given under a marine cargo policy which attaches as the goods are lifted from the quay at the port of loading and terminates when they are freed from the ship's tackle or landed from craft at the port of destination.
Quota share reinsurance Treaty reinsurance providing that the reinsurer shall accept a specified share of each risk.
Quota surplus reinsurance Reinsurance that combines Quota share reinsurance and surplus reinsurance.
Quotation Especially in life assurance, a statement by an assurer of the premium he will require for a particular assurance.
Quotation slip A slip on which an underwriter is asked to quote his terms for a proposed insurance for consideration by the proposer.
R/I Closing Form A form on which a direct insurer sets out closing details and which he sends the broker in order that the broker may close the reinsurance with the reinsurers.
R/I or direct Term used on a broker's slip when the broker has an order to place a risk but does not know whether it will be a direct insurance or a reinsurance.
R/I Order Form A form on which an insurer sets out details of a risk that he wishes to reinsure.
R/I Treaty Standard Slip A standard form for use by brokers in the placing of a reinsurance treaty.
Radioactive contamination The introduction of radioactivity through the escape of radiation from some radioactive substance.
Rain insurance Insurance against loss caused by a measured amount of rainfall occurring within a specified period.
Random sampling Selecting individual items from a large group in such a way that every individual item has the same chance of being included in the sample group.
Range The extent of classes of property covered by a policy or of the situation(s) at which it is covered.
Ransom insurance Same as Kidnap and Ransom insurance.
Rat(e)able contribution A proportionate contribution.
Rate The charge for insurance for each unit that is used as a basis for the calculation of premiums, e.g., per L100 of the value of property, or per capita for persons.
Rate guarantee An undertaking by an insurance company, as in an insured pension scheme, restricting the extent to which it will vary its rate of premium for a specified number of years.
Rate on line A rate of premium for a reinsurance which if applied to the liability accepted by the reinsurer will produce an annual premium sufficient to meet expected losses over a number of years.
Rated up Term applied to an insurance where the premium is higher than the norm.
Ratification Confirmation, as where a principal adopts as binding on him the act of another which was done on his behalf though without the principal's previous authority.
Rating The calculation of the premium applicable to an insurance / An assessment of standing (U.S.).
Rating bureau An organisation that collects statistics of losses and suggests to insurers what rates of premium appear to be indicated by the available facts (U.S.).
Ratio decidendi The principle of law on which a judgment in a lawsuit is based.
Real property The ownership of, or interests in land.
Realty All interests in land other than leasehold interests.
Reasonable despatch clause A clause in a marine insurance policy requiring that the insured shall act with reasonable despatch in all circumstances within his control.
Reasonable precautions clause A clause found in various classes of insurance policies that requires the insured to take reasonable precautions to guard against the occurrence of a loss.
Reassurance Reinsurance (q.v.) of life assurance.
Reassured Same as Reinsured.
Reassurer Same as Reinsurer.
Rebate A reduction or discount.
Rebating Reducing the premium as, for example, where the agent gives the insured all or part of the agency commission. This form of rebating is forbidden by law in some countries.
Recall of products insurance Insurance against the expense of recalling dangerous or defective products.
Receiver One appointed to manage property or receive the income of another.
Reciprocal exchange An unincorporated association for mutual insurance among members who pay premiums and share losses (U.S.).
Reciprocal insurance Insurance provided in a reciprocal exchange (q.v.).
Reciprocity The exchange of reinsurances between two reinsurers.
Recital clause The opening clause of a policy defining the parties.
Reconditioning charges Charges incurred by an insured to recondition damaged cargo and so minimise a loss.
Recourse indemnity Indemnity to an exporter against the risk of a buyer failing to pay for plant and equipment on the ground of alleged failure or defects and to a lender against the risk of an exporter's insolvency.
Recovery Money received by an insurer in respect of a loss, thus reducing the loss, by way of subrogation, salvage or reinsurance.
Recovery agent One who pursues on an insurer's behalf a claim against a carrier of goods in respect of loss or damage to them, customarily on a "no cure, no pay" basis.
Rectification The correction by the court of the wording of a written contract in order to give effect to what was the true agreement between the parties which the writing has failed to express.
Recurring endowment assurance An endowment assurance under which capital sums are payable by the assurer to the assured at stated intervals during the currency of the assurance.
Red Line Clause A clause printed in red in a marine cargo policy drawing the insured's attention to his obligation to preserve his right of recovery against a carrier or bailee for the benefit of the insurer.
Redemption Paying off a loan and therefore recovering the security, such as a mortgage.
Redlining Marking on a map an area within which one will not grant insurances (U.S.).
Reduced paid-up assurance Where, under a long-term life assurance the assured wishes to cease paying premiums, the policy is said to become paid up, the sum assured being reduced.
Reduced premium policy A life assurance policy where the premium in the first few years is lower than that for subsequent years.
Reducing option An option in a pension scheme to accept a reduced pension in consideration of an increased pension for one's surviving spouse.
Reduction factor A factor permitting the calculation of premiums or reserves for sickness insurance business from a table that relates to a particular period of indemnity.
Reduction of premium policy A life policy for which the premium is progressively reduced in later years.
Rehabilitation Helping a person who is under some handicap to resume a satisfactory life.
Rehabilitation of Offenders Act 1974 An Act that provides for certain offences, after a lapse of time, to be regarded as spent so that the offender will be treated in law as though he had not committed the offence. The Act is relevant to a proposer's discharge of the duty of disclosure.
Reinstatement Making good. Where insured property is damaged, a policy may give the insurer the option to make it good rather than pay the loss in money, See also Fires Prevention (Metropolis) Act 1774 / The revival of an insurance or reinsurance by paying a premium to make good cover that has been depleted by payment of a loss.
Reinstatement clause A clause in a fire insurance policy setting out the liability of the insurer if he elects or is legally obliged to reinstate the insured property in the event of a loss / A clause in a reinsurance treaty that provides for a premium to be payable to replenish the sum insured after a loss.
Reinstatement Memorandum Same as Reinstatement clause (1).
Reinstatement premium Premium payable to restore the sum insured to its original level after it has been depleted by the occurrence of a loss.
Reinsurance Transfer of all or part of the risk assumed by an insurer under one or more insurances to another insurer, called the reinsurer.
Reinsurance assumed Reinsurance accepted from a reinsurer.
Reinsurance broker A professional intermediary between insurers wishing to place reinsurance and those willing to accept it.
Reinsurance cover A reinsurance cover is a contract whereby the reinsurer undertakes to grant reinsurance for a series of original insurances over a specified period. The period is usually short in comparison with that of a reinsurance treaty which is as a rule expected to last for a long period.
Reinsurance of common account Marine reinsurance term applicable where an insurer has an obligation under one reinsurance contract to cede a proportion of a risk to one reinsurer and has subsequently entered into a long-term reinsurance contract with a second reinsurer to cede a fixed amount or proportion of all the insurances he (the insurer) accepts. He fulfils his obligation to cede under the second contract and reinsures on behalf of the first reinsurer such proportion of that cession as he is obliged by his prior obligation to place with the first reinsurer. This latter cession is known as reinsurance of common account, or reinsurance of joint account.
Reinsurance of joint account Same as Reinsurance of common account.
Reinsurance reserve A reserve to provide for the notional cost of reinsuring insurances that are in course so that part of the premiums are as yet unearned.
Reinsurance security The financial strength of reinsurers.
Reinsurance to close The method by which the underwriting account of a Lloyd's syndicate is closed by payment of a premium to cover outstanding liabilities into the underwriting account of a later year, or to other reinsurers.
Reinsurance treaty A contract between two insurers whereby defined risks insured by one party are reinsured by the other to an extent specified by the contract.
Reinsurance waiver clause A clause in a reinsurance contract whereby small adjustments to premiums on the original insurance are not made between the insurer and the reinsurer as it would be uneconomic to make them.
Reinsured The reinsured is the insurer who cedes insurance by way of reinsurance.
Reinsurer An insurer who accepts reinsurance business from another insurer.
Rejection risk insurance Insurance against the risk that exports, such as frozen foods, will be refused admission under regulations applied by the importing country.
Relationship clause A clause sometimes found in liability policies excluding liability to members of the insured's family.
Release The surrender or discharge of some claim or interest; the document evidencing the surrender or discharge.
Release of reserve Where a company has reserved money for a particular purpose and the reserve (or part of it) is found not to be required for that purpose it is said to be released.
Remainder period The period, after the initial period, in a business interruption policy covering wages on a dual basis, during which some payment is made in respect of wages incurred, at less than the 100% provided for the initial period.
Remoteness of damage Where damage is only indirectly caused by an event giving rise to liability, or where the occurrence of the damage could not reasonably have been foreseen, it is said to be remote and is not recoverable.
Renewable term assurance Temporary life assurance which the assured is given an option to renew for a specified number of years.
Renewable term reassurance Expression sometimes used to describe a permanent risk premium life reassurance which runs for the life of the policy or any shorter term agreed at the outset.
Renewal Continuing an insurance after it has been current for a period.
Renewal agreement An undertaking by an insurer in a policy to renew the insurance upon the insured's tender of the premium.
Renewal notice A notice issued by an insurer of the forthcoming expiry of an insurance, containing a request for payment of the premium necessary for its continuation.
Renewal premium The premium payable for the renewal of an insurance.
Repartition scheme A pension scheme for a body of workers under which the cost of pensions payable to former members of the body is paid by the contributions of present members.
Repayment mortgage A mortgage under which the sum advanced is repayable by instalments comprising both capital and interest.
Replacement clause A clause found in a marine cargo policy on machinery which provides that in the event of damage the insurer's liability shall be limited to the cost of replacing and fitting any damaged part.
Replacement cost insurance Insurance of property for the cost of its replacement without deduction for depreciation, conditionally upon the sum insured being the replacement value.
Replacement in kind In property insurance, the insurers often retain to themselves an option to pay for loss or damage or to replace it in kind.
Replacement value The value of property expressed as the cost of replacing it.
Reporting excess of loss treaty A facultative obligatory treaty, used principally for marine cargo reinsurance, which requires particulars of sums exposed on the cover to be notified to the reinsurer.
Reporting form basis A basis for the insurance of property where values at risk fluctuate during the year. The insured periodically reports the value at risk. These are averaged and at the end of the year the premium is adjusted accordingly (U.S.).
Representation A statement by a proposer about the facts relating to the risk proposed for insurance.
Request note A document prepared by an insurer with particulars of a risk offered for facultative reinsurance.
Res ipsa loquitur (The thing speaks for itself.) When in a legal action the onus of proof, e.g., of negligence, is on one party, he may sometimes discharge this onus by evidence of what has happened, if such a happening raises an inference of negligence.
Res judicata The principle that once a competent court has adjudicated on a point the parties or their successors may not reopen the matter except by way of appeal.
Rescission The setting aside of a contract.
Reserve A fund set aside out of assets for general or specific purposes after provisions have been made. Often used interchangeably with provision (q.v.).
Reserve account A fund set aside out of premiums retained temporarily by the reinsured to provide for the payment of claims that are ultimately the liability of the reinsurer under a reinsurance treaty / A fund that an insurer may be required by a government to maintain in a country to provide for the payment of claims in that country.
Resident inspector An employee of an insurance company who is responsible for the selling and servicing of the company's business in the area where he is situated.
Residual risks policy A contract, supplementary to a contractors' all risks policy issued on a contract by contract basis, to cover minor works, including going back to work on a lapsed contract.
Residual value In business interruption insurance expense incurred by the insured to minimise a loss may result in advantage continuing to the insured after the indemnity period covered by the policy. The value of this advantage is called the residual value.
Residual value insurance Insurance against the contingency that property will not be of at least a given value at some future specified date.
Respondentia A loan to the master of a vessel, on the security of its cargo, to enable the vessel to continue its voyage (Obs.).
Restraints One of the perils covered by the former plain form of marine policy was "arrest, restraints and detainments of all Kings, princes, and people". By the Marine Insurance Act 1906, First Schedule, rule 10, the term refers to political and executive acts, and does not include a loss caused by riot or by ordinary judicial process. An embargo is a restraint, but the anticipation of an embargo is not. "People" means the governing power, not the mob.
Restrictive covenant indemnity An indemnity against loss arising from acting in breach of a restrictive covenant on land, such as using the land in a way prohibited by such a covenant.
Retained benefits Rights under a pension scheme that an employee retains from employment which has earned them.
Retained line Same as Retention (l).
Retention The net amount of risk that an insurer or reinsurer does not reinsure but keeps for his own account / The amount of premium retained by an insurer after paving claims and expenses, viz., his profit (U.S.).
Retention bond In a construction contract where sums are payable by the principal to the contractor at various stages, the principal may be entitled to hold back a proportion as security. To enable the contractor to receive this he procures a retention bond from the insurer which protects the principal.
Retention limits The limits of amount up to which, in respect of various categories of insurance, the original insurer keeps the insurance for his own account and does not reinsure it.
Retention ratio The percentage of annual insurances that are renewed.
Retention schedule method A profit-sharing arrangement between reassured and reassurer in life reassurance, whereby the parties share on an agreed basis in the profits from a scheme covering a large number of lives (U.S.).
Retroactive Same as Retrospective.
Retrocedant Same as Retrocedent.
Retrocedent A reinsurer who himself effects reinsurance in respect of some of the risk he has agreed to bear.
Retrocession A reinsurance of reinsurance.
Retrocession-naire A reinsurer who accepts reinsurance (as distinct from direct insurance) from another reinsurer.
Retrospective With effect from an earlier date; looking backward.
Retrospective rating The system of basing the premium for an insurance or reinsurance on the actual loss experience, with retrospective effect.
Retrospective reserve The reserve obtained by accumulating premiums received in the past from which is deducted the value of insurances granted.
Retrosurance There is said to be retrosurance when, after reinsurer A has retroceded all or part of his risk to reinsurer B, reinsurer B then further cedes all or part of his risk to a third reinsurer.
Return commission The commission returnable by an agent to an insurer upon the cancellation of an insurance.
Return for no claim A provision found in some policies that if no claim is made under an insurance, the insurer will return part of the premium.
Return period The period within which it is mathematically probable that a natural phenomenon such as an earthquake of given intensity will recur.
Return premium Premium returned to the insured for some reason, e.g., that the insurance never attached or that the risk was reduced in some way, for example, because an insured vessel was laid up for a time.
Revaluation Re-expressing an amount (e.g. of earnings), by use of an index, to reflect its real value.
Reversed onus of proof The law normally places on a party to a lawsuit the burden of proving certain facts. This onus of proof is sometimes shifted to another party either by statute or by contract.
Reversion A right to succeed to property or a position / The repossession of property after a lapse of time or the happening of an event.
Reversionary annuity An annuity payable only after the date of a specified event such as the death of some other person.
Reversionary bonus A sum added to the sum insured under a with-profits life assurance, the sum becoming payable in full only when the policy matures or is terminated by death.
Revival Bringing into force again an insurance after it has lapsed.
Rider U.S. term for Endorsement (q.v.).
Rider policy A motor cycle insurance policy issued to a rider to grant cover in respect of machines he is riding, as distinct from a policy covering a specified machine.
Riding Establishments Act 1970 An Act that requires those who conduct riding establishments to hold liability insurance indemnifying them and the hirer of any horse in respect of liability for: (a)injury to the hirer, and; (b) injury to any third party.
Riesco At Lloyd's, a basis of allocating investment income in a calendar year over different years of account.
Riot Riot, at common law, has five elements: (a) a number of persons, not less than three; (b) a common purpose; (c) execution or inception of the common purpose; (d) an intent on the part of the persons to help one another by force, if necessary, against any persons who may oppose them; (e) force or violence displayed so as to alarm at least one person of reasonable firmness and courage. For England and Wales the Public Order Act of 1986 defines riot as the "participation of 12 or more persons using or threatening violence for a common purpose".
Riot (Damages) Act 1886 S.4(1) of the Act entitles persons whose property is damaged in a riot to obtain compensation from the police authority provided notice is given within fourteen days.
Rising cost method Same as Single premium method.
Risk Used in insurance in many senses, notably: the subject matter of insurance; uncertainty as to the outcome of an event; probability of loss; the peril insured against; danger.
Risk assessment Estimation of the extent of danger from a peril.
Risk assumption Taking on oneself a chance of loss.
Risk avoidance Taking steps to save oneself from exposure to a danger.
Risk index An index of insurances issued.
Risk management The systematic treatment of risk in order to preserve capital and income from financial loss arising from unfavourable events. This involves identifying, analysing and quantifying risks, taking measures to avoid or minimise loss, and deciding what financial treatment, such as hedging, insurance, and self insurance, is best calculated to minimise unavoidable losses.
Risk prevention Taking measures to prevent oneself from suffering loss from a peril.
Risk transfer Transferring to another responsibility for a potential source of loss or for the financial consequences of any such loss that may occur.
Risk-premium reassurance Life reassurance which reassures the risk of death by means of a series of one-year temporary assurances, so that the premium rate increases with age, while the sum reassured decreases by reason of the annual increase in the original assurer's reserves.
Road risks insurance Insurance of a motor trader in respect of vehicles on the road or in the course of a journey as distinct from internal risks insurance which applies to vehicles on his own premises.
Road Traffic Act 1988 An Act that requires the user of a motor vehicle to effect insurance of liability for bodily injury to third parties or for damage to their property arising out of road accidents. As an alternative the user may deposit a sum of money or provide security.
Robbery The offence of stealing accompanied at the time or immediately beforehand by force exercised against a person or by putting or seeking to put a person in fear of being subjected to force.
Roller reinsurance Reinsurance that transfers a risk from one period of account to another.
Room, The The hall at Lloyd's in which underwriters sit to do business.
Rota Committee A committee appointed at Lloyd's to interview candidates for underwriting membership or for admission as a Lloyd's broker or underwriting agent.
Rotation clause A clause in an open cover in which many insurers participate, to provide that in respect of a small declaration by the insured the proceeds shall not (for reasons of economy) be allocated among all the insurers but shall go only to one group of insurers, the proceeds of subsequent declarations going to another group and so on in rotation of all the groups concerned.
Rovers Same as Pirates.
Rules for Construction of Policy A set of twelve rules for the interpretation of a marine insurance policy where the context does not otherwise require. They are contained in the First Schedule of the Marine Insurance Act 1906.
Rules of Practice Rules established by the Association of Average Adjusters as a guide to average adjusters in adjusting claims. They are in five sections: (a) General rules (b) General average (c) York/Antwerp Rules (d) Damage and repairs to ship (e) Particular average on goods.
Running Down Clause Same as Collision Clause.
Running off Term applicable where an insurer has ceased to write an insurance or class of insurances but a liability remains under contracts already written which are said to be running off.
Run-off account At Lloyd's, a year of account kept open after the date on which it would normally have been closed.
Run-off liability Liability that remains to be met after insurance has terminated.
Run-off statement A statement in respect of outstanding claims which compares the sums reserved for settlement of them with their actual cost.
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